THE British pound has surged after the UK High Court ruled that parliament must vote on whether or not to trigger Article 50.
It ruled that Prime Minister Theresa May could not begin the process of leaving the EU – as outlined in the Lisbon Treaty – without gaining parliamentary approval.
The decision could derail Brexit given that the majority of lawmakers in the UK supported the Remain camp.
The pound rose 0.8% immediately after the ruling, and ripped higher again at midday when the Bank of England’s monetary policy committee announced a unanimous vote to leave interest rates and quantitative easing unchanged in November.
Analysts predict further volatility for the currency as Thursday’s decision is to be appealed in court and, should that fail, parliamentary debates will begin, maintaining uncertainty.
“They could also seriously tie the Government’s hands in the negotiations by imposing all sorts of conditions, including for example by making demands with respect to guaranteeing access to the Single Market,” said Chris Scicluna, head of economic research at Daiwa Capital Markets.
The pound had plunged when May announced she would prioritse immigration over access to the single market.
She had planned to trigger Brexit by the end of March 2017, but the new ruling, if upheld, is likely to delay her plans significantly, or at least force her to change tact and adopt a ‘soft’ Brexit strategy.